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It is
common on commercial construction projects for the owner to hire the architect
to perform services during construction, in addition to designing the project. Among
other things, the architect’s construction phase services will typically
consist of periodic observations and evaluations of the progress of the
construction work. An architect may be charged with observing the work to
determine whether or not the building is being constructed in accordance with
the contract documents, including the drawings the architect has prepared.

When there
are defects in the construction, an owner may attempt to hold the architect
liable (usually in addition to the contractor) for said defects, even if there
are no errors or omissions in the architect’s design or specifications. The
theory behind such an assertion is typically that, even if the defect was
caused by the contractor, the architect was charged with observing the work and
should have called out the contractor’s defect and seen that it was corrected.

In such a
situation, can the architect be held liable for defects in the contractor’s
work? The answer – as is so often the case – depends on the architect’s
contract with the owner. While many owner/architect agreements contain
provisions requiring the architect to make periodic inspections of the work, it
is typical for the agreements to contain language limiting the architect’s
responsibility, such as the language used in the AIA Document B101-2017
Standard Form of Agreement Between Owner and Architect:

“The
Architect shall not have control over, charge of, or responsibility for the
construction means, methods, techniques, sequences or procedures …, nor shall
the Architect be responsible for the Contractor’s failure to perform the Work
in accordance with the requirements of the Contract Documents.”

AIA
B101-2017, at § 3.6.1.2.

An
architect in this situation would likely argue that this provision is
exculpatory in nature, i.e.,
that it relieves the architect from any liability for the contractor’s acts or
omissions. The argument, according to the architect, is that the language “nor
shall the Architect be responsible for the Contractor’s failure to perform the
Work in accordance with the requirements of the Contract Documents” truly means
that the architect cannot be responsible for the contractor’s failure to
perform the work in accordance with the contract documents. Some courts have
adopted this position, and have dismissed claims by owners suing architects for
construction defects.

But the
majority of courts have taken a more nuanced view of this often-used contract
language. These courts have found that exculpatory language such as the
quoted-language from the B101 doesn’t necessarily mean the architect is off the
hook. The Supreme Court of Alabama explained this distinction in one such case:

While
the agreement may have absolved the Architect of liability for any negligent
acts or omissions of the contractor and subcontractors, it did not absolve the
Architect of liability arising out
of its own failure to inspect reasonably. Nor could the Architect
close its eyes on the construction site and not engage in any inspection
procedure, and then disclaim liability for construction defects that even the
most perfunctory monitoring would have prevented, or fail to advise the owner
of a known failure of the contractor to follow the plans and specifications.

Watson,
Watson, Rutland/Architects, Inc. v. Montgomery Cty. Bd. of Educ., 559 So. 2d 168,
173 (Ala. 1990) (emphasis added). In other words, while the architect is not
responsible for the contractor’s negligence, the architect is required to perform
its construction observation services reasonably, as required under its
contract. Further, when the architect actually observes deviations from the
contract documents, it is required to report these to the owner.

There are
several takeaways respecting such designer liability:

First,
courts distinguish between full-time construction observation, and periodic
evaluations of the work. Courts will hold the architect to a higher standard
vis-à-vis construction defects in the latter situation. Architects should make
sure that, unless they are truly being engaged to perform full-time
observation, their contracts require observations of the work to occur only at
periodic, reasonable intervals.

Second, the
contract language matters. For example, an obligation to notify the owner of any defects in the work,
whether or not observed by the architect, can be interpreted as something more
akin to a guarantee of the contractor’s work; which is at odds with the
exculpatory language, discussed above.

Lastly,
performance matters. Whatever the contract language, all parties to the
contract must perform as contracted, and if they do they have meet their
obligations. Even the strongest exculpatory language will absolve an architect
for failing to perform the construction administration services it agreed to
perform. But performance as agreed shields that architect when performed as
agreed.

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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